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Wednesday, June 23, 2010

Administration Will Appeal Deepwater Drilling Moratorium Ruling

Jun 22: Department of Interior (DOI) Secretary Ken Salazar issued a statement regarding the decision in U.S. District Court in New Orleans lifting the deepwater drilling moratorium. Salazar said, "The decision to impose a moratorium on deepwater drilling was and is the right decision. The moratorium is needed to protect the communities and the environment of the Gulf Coast, and DOJ is therefore appealing today's court ruling.

"We see clear evidence every day, as oil spills from BP's well, of the need for a pause on deepwater drilling. That evidence mounts as BP continues to be unable to stop its blowout, notwithstanding the huge efforts and help from the federal scientific team and most major oil companies operating in the Gulf of Mexico. The evidence also continues to mount that industry needs to raise the bar on blowout prevention, containment, and response planning before deepwater drilling should continue. Based on this ever-growing evidence, I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities."

On June 22, U.S. District Judge Martin Feldman, for the Eastern District of Louisiana in New Orleans issued an opinion and order lifting the moratorium on deepwater offshore drilling (Hornbeck v. Salazar CA 10-1663) [See WIMS 6/22/10]. The Moratorium, entitled "Suspension of Outer Continental Shelf (OCS) Drilling of New Deepwater Wells," was issued by DOI on May 28, 2010, and NTL No. 2010-N04 [See WIMS 5/28/10]. The six-month moratorium applied to all drilling on the Outer Continental Shelf in water at depths greater than 500 feet."

The Administration's decision to appeal will not be popular among many public officials and business interests in the Gulf Coast states. The American Petroleum Institute (API) immediately issued a release supporting the Judge's decision. U.S. Senator Mary Landrieu (D-LA) praised the decision and said "the Obama Administration's arbitrary six-month deepwater drilling moratorium that threatens to put 33 drilling rigs and thousands of Louisianians indirectly employed by service companies out of work."

Senator Landrieu said, "Judge Feldman made the right decision. I strongly urge the Obama Administration not to appeal his ruling. The Administration should instead implement the recommendations that I and numerous other leaders and experts from the Gulf Coast have proposed -- all of which would result in demonstrably safer offshore practices, without the devastating impact of this blanket moratorium on new drilling. As I have already communicated to President Obama, the arbitrary moratorium is likely to have a greater negative effect on Gulf Coast families and businesses than the spill itself. Preventing new offshore drilling is far more likely to worsen, and not improve, the impacts of this spill upon both the economy and the environment of the Gulf Coast." Rather than endorsing a six-month "pause" for deepwater drilling operations in Federal waters, Sen. Landrieu identified eight recommendations in her letter to President Obama that she said could achieve the Administration's safety and oversight goals without crippling Gulf states' economies.

Louisiana Governor Bobby Jindal (R) had filed an amicus brief in the District Court, in support of the removal of the moratorium. The brief argues that states are entitled to participate in the policy and decision-making process by the Federal government on issues relating to the exploration and development of Outer Continental Shelf minerals and requires the Secretary of Interior to cooperate with affected states. The brief states, "Inasmuch as the State of Louisiana was completely ignored by defendants in the establishment of this moratorium for alleged safety reasons, the question arises whether that failure renders Defendants' action invalid."

Mississippi Governor Haley Barbour (R) issued a brief statement saying, "Hopefully, the judge's ruling will go into effect quickly and be upheld on appeal. The moratorium is bad policy." Alaska Governor Sean Parnell (R) issued a statement saying, "Today's ruling by Judge Feldman is good for the nation. Unfortunately, legal action isn't going to put Alaskans to work this summer, but this decision indicates that the courts are going to uphold the law and operators can expect to be treated fairly or be able to seek recourse. We hope this sends a clear message to federal agencies to grant the permits that Shell will need to drill in the Outer Continental Shelf in 2011."

The Center for Biological Diversity (CBD) and several other environmental groups including Sierra Club, Florida Wildlife Federation, Defenders of Wildlife and Natural Resources Defense Council said they plan to appeal a Judge's decision. CBD's Miyoko Sakashita said, "The judge's decision to lift the moratorium trades oil-industry profits for the safety of offshore workers, the long-term health of the Gulf Coast economy, and the environment. The ongoing BP catastrophe in the Gulf should be enough to justify putting an end to all new offshore drilling. It is obvious that the entire system is broken, and Big Oil lied about the risks of oil spills and its ability to respond to them."

CBD indicated in a release that ". . .contrary to Hornbeck's claims and the judge's order, the moratorium was actually very narrowly tailored to fix regulatory problems identified by the government that lead to the BP oil spill. In fact, the moratorium only affected 33 deepwater drilling rigs, leaving the production of approximately 3,600 platforms unaffected.

Access the statement from DOI (click here). Access a release from Sen. Landrieu and link to the letter to the President (click here). Access a fact sheet on DOI's OCS policy with links to related documents (click here). Access a release and link to the LA amicus brief (click here). Access the statement from AK Governor (click here). Access a release from CBD (click here). Access Judge Feldman's 22-page opinion (click here). Access the 3-page Order (click here).